July 01, 2013

Obama's Climate Plan for International Trade

May 2012 rally in Addison, Texas, to "Bring the Trans-Pacific Partnership (TPP) into the light of day."

By Ilana Solomon, Sierra Club Trade Representative

President Obama's ambitious plan to tackle climate change, outlined in his July 25 speech at Georgetown University, comes as welcome news to the Sierra Club. His stated intention to use the full authority of the Clean Air Act to limit air pollution from both new and existing power plants, and his declaration that he won't approve the Keystone XL pipeline if it harms the climate, are bold game-changers, for which we thank the president.

But tucked away in the president's Climate Action Plan is an idea that could actually expand trade in environmentally dangerous products, undermining our clean energy future.

President Obama's goal -- helping countries skip past the dirty phase of development -- is laudable, and critical to combatting climate chaos. Unfortunately, his approach -- facilitating global free trade in environmental goods and services -- is not an effective way to achieve that goal.

In his speech, the president said, "I'm directing my administration to launch negotiations toward global free trade in environmental goods and services, including clean energy technology, to help more countries skip past the dirty phase of development and join a global, low-carbon economy."

The Climate Action Plan further fleshed out this idea, stating that the U.S. will work with other countries to launch negotiations at the World Trade Organization toward global free trade in environmental goods, including solar and wind. The administration wants to build on the recent work of the 21 countries that make up the Asia-Pacific Economic Cooperation (APEC), which agreed to greatly reduce tariffs over the next two years on a list of 54 "environmentally beneficial" products. The theory is that if governments reduce the tariffs, the products will be more readily traded.

But if you dig into APEC's lists of products whose tariffs would be reduced or eliminated, you'll see that many of the products on the APEC list, such as incinerators and centrifuges, could actually harm the environment.

Incinerators are machines used to burn waste material and are known to emit various toxic chemicals and byproducts into the air, water, and ground in the process. Steam generators are found in equipment that can be used to produce power from biomass and are also found in most other dirty fuel-production processes such as nuclear and coal-fired power plants that pour harmful toxic chemicals into the air we breathe and emit climate-disrupting carbon pollution. And while centrifuges are used to filter and purify water for a variety of environmental, industrial, and scientific applications, they can also be used in the production of dirty and outdated fuels such as oil and tar sands.

For these and other reasons, many developing countries, such as India, see this approach as an expansion of free trade that will benefit the corporations in developed countries, but will do little to protect our climate. India has proposed a different, potentially more promising approach that would essentially allow for temporary facilitated access (i.e., reduced tariffs) on specific goods that are needed in environmental projects, therefore helping to ensure that the product is used in a manner which actually benefits the environment.

Again, while the president's goal of helping countries transition to a clean energy future is critical, unlocking clean technology and boosting clean energy markets should not be completely under the thumb of the World Trade Organization or through a purely "free-market approach."

To help countries leapfrog past dirty fossil fuels, developed nations like the United States must take the lead in providing finance and clean technology to developing countries. Discussions on this transfer of resources are currently taking place within the context of the United Nations Framework Convention on Climate Change, and the U.S. has already begun to offer financial support through a number of funds. This is an area in which the United States can and must truly lead.

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